John wants to buy a certain type of used car. Laura owns this type of used car. Laura claims that her car is of excellent quality. She knows the real condition of her used car. In fact, her car is not in good condition. John does not have any knowledge in automobile mechanics and thus does not know whether Laura's car is in excellent condition or not. John is risk neutral. John is willing to buy a used car in a good condition at $21,000 and used car in less than a good condition at $11,000. Laura makes an offer to John for $17,000. Since her car is in less than a good condition, she would be willing to sell it to John or anybody else for $10,000.

• Will John accept her offer? Explain your answer
• What is the maximum price at which John would buy Laura's car? Explain your answer